KRISTI YUTHAS may be a leader in microfinance analysis, however her work is anything but small.
Microfinance is the lending of small sums of money to low-income clients. For Third World entrepreneurs—often women who are the sole support for their families—this means loans to support such enterprises as a farm in Peru, a cloth weaving business in Guatemala, or the selling of homemade tortillas in Nicaragua.
The microfinance industry has grown by over 1,300 percent in the past 10 years and now provides funds to over 150 million people in developing countries. The problem, according to Yuthas, assistant professor of Business Administration, is that microfinance lenders have become too concerned with their own bottom line and do not provide the training necessary for clients to grow their businesses and lift themselves out of poverty.
"There's a lot of money going out, but not a large amount of impact," says Yuthas. "Over time the focus has shifted so much to lending institutions making money that they forgot small business owners weren't being served."
The professor's work is centered on creating a solution. She has partnered with Opportunity International, a microfinance institution, to develop a training program for its loan recipients—initially in Columbia and then in developing countries around the world. Microentrepreneurs will receive the basics of small business: how to budget, control costs, manage risk, and identify opportunities.
Eventually the training will be made available to elementary school children in countries where students often do not attend school beyond sixth grade. "That makes entrepreneurship an important life skill that needs to be integrated into education at a young age," says Yuthas.